iGB North America magazine IGBNA Aug/Sep | Page 15

Law and Legislation access to another company’s products and technology, another potential benefit is that the agreement can provide an indemnity against infringing any other’s patents as well, should the licensed products or technology be used, significantly reducing the risks even further associated with a product launch in a new market. While the exact terms of the deal are not available, it is clear that both companies stand to benefit from this agreement. From NetEnt’s perspective, the license agreement provides access to already established brands and technologies in the North American market, speeding up the time that would typically be needed for product launch and reaching a wide customer base. IGT is a world leader in gaming equipment, and manufactures half of all slot machines in the US1, so it is likely that the deal would provide NetEnt with an opportunity to expand its business by offering its technology in land based slot machines and physical machines on the casino floor2. NetEnt also eliminated its risk of infringing IGT patents and possibly other patents as well. This was particularly significant since NetEnt is just entering the US market. Business as usual The licensing deal with NetEnt is in line with the normal business operations of IGT. In fact, IGT has been accumulating patents and building up its IP portfolio and licensing patents for decades. For example, all modern slot machines use a variation of the Telnaes patent, a patent granted to Norwegian mathematician Inge 1 2 3 4 “All modern slot machines use a variation of the Telnaes patent, a patent granted to Norwegian mathematician Inge Telnaes in 1984. IGT bought the patent in 1988, and then licensed it to the entire industry.” Telnaes in 1984. The patent revolutionized the gambling industry, as it was the first invention to incorporate a random number generator on a computer chip to determine the outcome of a slot machine game3. IGT bought the patent in 1988, and then licensed it to the entire industry4. Last year, IGT greatly expanded upon its ownership and access to IP in merging with GTECH, and it currently has a presence in over 100 companies worldwide. The licensing deal with NetEnt further solidifies the importance of IGT’s vast and impressive IP portfolio in the gaming world, and its necessity in building up its portfolio. Not only is there a significant economic benefit in the deal for IGT, the licensing opportunity signifies that IGT has maintained and increased its hold as a powerful force in gaming and entertainment, and that its patents are relevant and necessary. Conclusion It is clear that companies looking to enter into the US gaming space should be aware of patents before entering the market. The leaders in the US gaming industry tend to own enormous patent portfolios, and will aggressively protect their IP. NetEnt and https://www.netentcasinos.com/blog/netent-signs-ip-patent-cross-license-agreement-with-igt/ http://www.vegasguy.com/articles/netent-patent-license-igt/ http://www.uh.edu/engines/epi2740.htm http://www.lexology.com/library/detail.aspx?g=7f2e14a5-db92-42d9-8cf5-36af06e55efa IGT’s license agreement is an exemplary model of the strategies companies can take in order to effectively expand their global reach. NetEnt and IGT are only one representation of numerous companies who are already effectively utilizing this strategy. Entities should look to these models in order to effectively and profitably expand their growth. Paul Taufer is a partner and Stacy Rush a Technical Advisor at DLA Piper, a leading international law firm with offices in 30 countries. Paul and Stacy are based in DLA Piper’s Philadelphia office in the US. Together, they advise companies involved in the gaming industry on all forms of intellectual property prosecution, litigation, opinions and licensing, along with mergers and acquisitions, for clients ranging from established companies to start-ups. Paul is a registered patent attorney and lawyer licensed to practice in Pennsylvania and New Jersey. Email: [email protected]. iGamingBusiness North America | Issue 20 | August/September 2015 | 15